A nearly completed new power line could restore electric cooling systems in Japan’s tsunami-crippled nuclear plant, its operator said Thursday, raising hopes of easing the crisis that has threatened a meltdown.
Tokyo Electric Power Co. spokesman Naoki Tsunoda said the new power line to Fukushima Dai-ichi is almost complete. Officials plan to try it “as soon as possible” but he could not say when.
Meanwhile, conditions at the plant appeared to worsen Wednesday, with white smoke pouring from the reactor complex and a dangerous surge in radiation levels forcing workers to retreat for hours from their struggle to cool the overheating reactors.
The chief of the International Atomic Energy Agency said he would go to Japan as soon as possible to assess the danger. He called the situation serious and urged the Japanese government to provide better information to the agency.
The new line would revive electric-powered pumps, allowing the company to maintain a steady water supply to troubled reactors and spent fuel storage ponds, keeping them cool. The company is also trying to repair its existing disabled power line.
The word came as international concern mounted over the deteriorating situation at the Fukushima Dai-ichi plant, where the danger from the reactors has nearly overshadowed the human tragedy of last week’s magnitude 9.0 earthquake and subsequent tsunami that pulverized Japan’s northeastern coast and is feared to have killed more than 10,000 people.
The 180 emergency workers have been working in shifts to manually pump seawater into the reactors because last week’s earthquake and tsunami disabled main and backup power for electric-powered cooling pumps.
European Central Bank President Jean-Claude Trichet said the central bank isn’t discounting the possibility that the euro-region may face a greater risk of inflation.
“In our own judgment there was a balance between risks of the price stability in the medium run but we did not exclude that the future of this balance is unbalanced on the upside,” Trichet said at a press conference after a meeting of Group of 20 nations in Paris today. He also said that the ECB’s rate- setting policy is independent from unconventional measures.
Trichet last month toughened his tone on inflation as labor unions use strengthening economic growth to justify pay demands and companies pass on higher energy costs. Euro-region inflation in January accelerated to 2.4 percent, the fastest since October 2008, and Volkswagen AG, Germany’s biggest automotive employer, earlier this month agreed to raise compensation for 100,000 workers by 3.2 percent to avert strikes.
The ECB is looking “very, very carefully” at oil prices, Trichet told reporters after the briefing. “No second-round effects,” that “is our motto.”
Crude oil prices have surged 14 percent over the past six months, eroding households’ purchasing power and adding pressure on companies to protect their earnings through price increases. Trichet said that G-20 ministers also “noted inflationary pressures” and that they “were to be taken seriously.”
The Frankfurt-based ECB, which aims to keep annual gains in consumer prices just below 2 percent, in December forecast inflation to average about 1.5 percent in 2012. It will release its latest inflation forecasts next month.
ECB governing council member Axel Weber also noted that “the upward pressure is increasing” on inflation.
“I think this is the best characterization of what we see in Europe,” he told reporters. “I’ve already said in the past that we’re above 2 percent now, with a tendency to increase. I think that the turnaround in inflation developments might not come as soon as we expected in the past. So, clearly, there are risks to the upside.”
U.K. consumer confidence plunged the most since 1994 this month as an increase in sales tax hurt shoppers’ appetite for spending, a report by GfK NOP Ltd. showed.
The index of sentiment fell 8 points from December to minus 29, the lowest since March 2009, the research group said in a statement in London today. All five measures of the index fell, with a gauge on the climate for making major purchases dropping 22 points to minus 29.
Prime Minister David Cameron, who raised value-added tax to 20 percent from 17.5 percent this month, has vowed to stick to planned spending cuts to reduce the budget deficit even after the economy unexpectedly shrank in the fourth quarter. Household sentiment may be further undermined as inflation accelerates and the economy endures what Bank of England Governor Mervyn King warned will be a “choppy” recovery.
“Today’s figures, when combined with the bleak economic forecast, will make talk of a double-dip recession unavoidable,” GfK Social Research Managing Director Nick Moon said in the statement. “With inflation on the up and the full force of the cuts yet to hit, these figures could be the beginning of a very painful period.”
The pound declined 0.3 percent against the dollar today and was at $1.5876 as of 11:02 a.m. in London.
Debt Specter
Cameron reasserted his commitment to eliminating the deficit at the World Economic Forum in Davos, Switzerland today.
“Our first priority is to kill off the specter of massive sovereign debts,” he said in a speech. “We can’t just flick on the switch of government spending or pump the bubble back up.”
A measure of the general economic situation over the next 12 months fell 7 points to minus 30, GfK said. An assessment of the economy over the last year dropped 3 points to minus 54.
A gauge of Britons’ views of their personal finances for the coming year fell 4 points to minus 12, and an index for the last year declined 2 points to minus 18. GfK NOP conducted the survey of 2,000 people from Jan. 7 to Jan. 16. The research was carried out on behalf of the European Commission.
U.K. inflation, which has exceeded the central bank’s 2 percent target for more than a year, accelerated to 3.7 percent in December. King said on Jan. 25 that it may rise to between 4 and 5 percent in the coming months and domestic spending faces “strong headwinds,” partly due to a squeeze on incomes.
Inflation Expectations
A separate report today from Citigroup Inc. and YouGov Plc showed that consumers’ inflation expectations for the coming year rose to 3.6 percent in January, the highest since September 2008, from 3.5 percent in December.
The drop in consumer confidence is hitting demand at stores and for property, reports yesterday showed. The Confederation of British Industry said its retail-sales index fell in January for the first time in three months, while Hometrack Ltd. reported that home prices dropped for a seventh month as demand plunged.
Still, the National House-Building Council said today that new housing registrations, a gauge of future construction, rose 3.3 percent to 7,385 in December from a year earlier. NHBC Chief Executive Officer Imtiaz Farookhi said the “biggest obstacles” to the recovery in homebuilding are mortgage availability and “monetary pressures” on consumers.
What is the best financial advice you ever received?
It’s hard to be an actor and be able to plan for lean times… but they happen and you must be ready. The profession is very much feast or famine, and when you consider 90 per cent of artists in Canada live below the poverty line you must ask yourself: are you ready for tough times? Don’t be afraid of part time jobs. They can facilitate peace of mind as you wait for the roles you need and want.
What is the best information you researched yourself?
Never carry a balance on your credit cards and get into real estate as early as possible.
What has been your savviest investment?
Any savings as opposed to spending really! When my kids first started grade school I took out RESPs for them and deposited $2,000 each for them yearly. It is paying off for me big time now . . . I heartily recommend RESPs starting at an early age.
Have you learned any financial lessons the hard way?
I unfortunately had a very messy and costly divorce recently that left me almost bankrupt a few times. With the love of friends and family I am finally getting back on my feet and hope I’m lucky enough to keep working for a loooong time. This brings me to another piece of advice: avoid family law lawyers who encourage delay or confrontation or both while leeching off your retainer funds! Get to know the law yourself and assert that you are the jockey and they are the horse!
How did your childhood influence your attitude toward money?
Despite being of very limited means my parents still could afford a home, food, and whatever schooling we needed. They sent me to LAMDA in England, paid for flying lessons and for my university. They were great savers. I scarcely approach their talent for this.
What was your first big purchase?
I bought a house when I was about 28. It was the earliest I could afford a high-ratio, CMHC-insured mortgage. I used the allowance for first-time home buyers to use a repayable part of personal RRSPs for the down payment. It started a cycle of home ownership that paid off.
What advice would you give to people about to enter the entertainment industry?
An actor in Canada is not the richest profession. Working for CTV is NOT like working for NBC! Learn your profession, always be prepared, and be prepared to try new things. Whatever is worth doing is worth doing well. I have a motto: do one thing that scares you every day. Internet stuff is a wild west that must be explored and tamed. Also: there is a cult of celebrity out there these days with the proliferation of YouTube and shows like So You Want To Be A Star. Don
ST. LOUIS
European Central Bank President Jean- Claude Trichet warned governments not to rely on the ECB to get Europe out of its debt crisis and urged them to step up efforts to tighten fiscal rules.
“Monetary-policy responsibility cannot substitute for government irresponsibility,” Trichet told German lawmakers today in Wildbad Kreuth, Bavaria, according to a text provided by the ECB. “Europe cannot afford to rest halfway, we need to be more ambitious. The proposals that we have seen in Brussels do not go far enough in the ECB’s view.”
Belgian and Irish credit-default swaps reached a record today and the cost of insuring the debt of nations from Portugal to Italy also rose. European finance ministers have pledged to toughen budget-deficit rules in a bid to contain the region’s debt crisis, though they have stopped short of meeting the ECB’s demand for more automatic penalties.
“We should be inflexible in applying sanctions if rules are breached,” Trichet said. “In limiting the power of discretion, we will strengthen the power” of the Stability and Growth Pact. “There must be a binding code of conduct for all parties concerned.”
The Markit iTraxx SovX Western Europe Index rose 1 basis point to a record 214 basis points today after credit-default swaps on Belgium jumped 14 basis points and Ireland’s increased by 6 basis points to an all-time high. Contracts on Portugal rose 9 basis points to 534, the highest level since Nov. 30.
Euro Drops
The euro today headed for its biggest weekly loss against the dollar in more than a month on bets the U.S. economy will recover faster than Europe’s. The single currency fell to $1.2983 at 3 p.m. in Frankfurt, down from $1.3385 a week ago, after a U.S. payrolls report showed employers added jobs for a third month and the unemployment rate dropped to 9.4 percent.
With the sovereign crisis showing little sign of abating, a Chinese central bank official pledged today that Europe and the euro will remain an investment priority for the nation’s world- record $2.65 trillion of foreign-exchange reserves.
“The euro and the European financial markets are an important part of the global financial system and were, are and will be one of the most important investment areas for China’s foreign-exchange reserves,” Deputy Governor Yi Gang said in a statement on the central bank’s website no faxing payday loan.
Emergency Measures
The ECB in December extended emergency liquidity measures for banks through the first quarter after Ireland’s aid package failed to convince investors that governments can push down budget deficits and prevent a breakup of the euro area. It has also stepped up government bond purchases after pausing the program for three weeks in October. Trichet said the purchase program is “ongoing.”
The ECB bought Portuguese government debt today, according to two people with knowledge of the transactions. The purchases mostly involved short-term securities, said one of the people, who asked not to be identified because the trades are confidential.
The ECB decided to buy sovereign debt in May to supplement a 750-billion euro ($974 billion) rescue plan for debt-stricken nations. It had already bought 60 billion euros of covered bonds to encourage bank lending, which Trichet said today will be held to maturity.
‘Malfunctioning’ Markets
The decision to buy government bonds “was certainly not to finance debt-laden member states, but to address some severe malfunctioning of markets,” Trichet said. “Let me stress solemnly that our monetary-policy stance is itself designed to deliver price stability over the medium term.”
The lawmakers from German Chancellor Angela Merkel’s Bavarian allies, the Christian Social Union, backed Trichet’s stance and said the bank must refocus on its core inflation fighting remit and limit its bond purchases.
“The independence of the ECB must be upheld and political influence continue to be ruled out of decision making,” the CSU, the sister party to Merkel’s Christian Democrats, said in a policy paper presented to Trichet today.
Euro-area inflation accelerated to 2.2 percent in December, exceeding the ECB’s 2 percent limit for the first time in more than two years. Economists forecast the bank will raise its key interest rate from a record low of 1 percent in the fourth quarter of this year, a Bloomberg survey shows.
How important is the federal deficit?
According to a new national poll, it’s very important in the minds of most Americans. But a CNN/Opinion Research Corporation survey released Monday also indicates that only one in five believe that deficit reduction should be the main goal of government today.
Sixty-eight percent of people questioned in the poll say they personally worry a lot about the size of the federal deficit, with one in four saying they only worry about it a little and 7% say they don’t worry at all about the federal deficit.
The poll also indicates that nearly eight in ten say earmarks are unacceptable, with just 19% of the public saying that earmarks, which are practice of many members of Congress of adding to bills spending project provisions for their home districts or states, are acceptable.
Opposition to earmarks earlier this month helped sink a push by Senate Democrats to pass a budget that included billions of dollars in the provisions.
"The concerns over the deficit and the opposition to earmarks helps explain why nearly half say that reducing the deficit is very important," says CNN Polling Director Keating Holland. "But only 22% say that deficit reduction should be the government’s main goal."
CNN poll numbers released last week indicate that 57% opposed an increase in the deficit to pay for tax changes and unemployment benefits, which were part of a tax cut compromise between President Obama and congressional Republicans that was passed into law.
But a CNN survey from November showed that holding the line on Social Security, Medicare, and taxes were more important to most Americans than deficit reduction. In that poll, just 19% of those surveyed thought reducing the federal deficit was more important than preventing cuts to Medicare and Social Security, and 28% believed it was more important than avoiding cuts to Medicaid.
But that survey showed that cutting deficits was as or more important than preventing defense cuts, stopping cuts to art funding or cutting government salaries.
"That may mean that reducing the deficit may be a hard sell when it comes at the cost of higher taxes or reductions in government programs," adds Holland.
The CNN/Opinion Research Corporation poll was conducted Dec. 17-19, with 1,008 adult Americans questioned by telephone. The survey’s overall sampling error is plus or minus three percentage points.
China agreed to take steps that would counter mounting losses for U.S. software companies from piracy and spur shipments of farm goods, as the two nations sought to ease trade tensions.
“We made measurable progress to open the Chinese market to U.S.-made products,” U.S. Commerce Secretary Gary Locke said yesterday at a news conference ending two days of meetings with China’s Vice Premier Wang Qishan in Washington. “Of course, now we need to ensure full implementation of these promises.”
Trade tensions have increased as China reported a record $153.3 billion of exports for November and some U.S. lawmakers called for legislation on Chinese imports to combat any advantages from what they say is an undervalued yuan. The agreements announced yesterday come ahead of a visit to Washington by Chinese President Hu Jintao next month.
“Today’s promises must be measured not by words on paper, but by tangible progress on the ground,” Myron Brilliant, senior vice president of the U.S. Chamber of Commerce, said in a statement after the announcements. “We urge both governments to quickly agree on metrics in future discussions that will quantify that new efforts are in fact translating into results.”
Trade Deficit
Locke and U.S. Trade Representative Ron Kirk met with Wang and a Chinese delegation in Washington as part of the 21st annual Joint Commission on Commerce and Trade. The U.S. trade deficit with China widened to $201 billion in the first nine months of this year, more than the deficits with the next seven largest trading partners combined.
China is at the same time the U.S.’s third-largest export market with $69.5 billion of sales in 2009. Sales of goods and services by U.S. companies in China reached $98.4 billion, more than a fourfold jump from 2000, according to the U.S.-China Business Council, a Washington-based group that represents companies including Wal-Mart Stores Inc. and Citigroup Inc.
The Chinese government also at the meetings offered fresh pledges on express delivery, wind-turbine equipment and medical- device regulations. The two nations will start work on an agreement to end restrictions on U.S. beef and poultry exports to China, Agriculture Secretary Tom Vilsack said.
Chinese Middle Class
“China’s burgeoning middle-class are discouraged by the appalling food safety records within China and are increasingly looking for food products from overseas,” Guan Anping, chief consultant at Beijing Duebound Law Office and a former Chinese trade official, said by telephone today.
Japan and China imposed restrictions on U.S. beef imports in 2003 after mad-cow disease was found in three U online pay day loans.S. cattle. China began imposing anti-dumping duties on U.S. broiler chicken products in September after the Ministry of Commerce said an investigation showed the American poultry industry received subsidized soybean and corn.
In addition, China has also called on the U.S. to relax export controls on technology products, the official Xinhua News Agency reported, citing Commerce Minister Chen Deming. China aims to achieve a “greater growth” in imports as it maintains export growth, Chen was cited as saying.
A press official with the Ministry of Commerce, who refused to be identified because of the agency’s rules, declined to comment.
U.S. Lawmakers
The U.S.-China trade gap, the drop in American manufacturing employment and the lack of appreciation of the Chinese currency, the yuan, have focused U.S. lawmakers on the commercial relationship. The House of Representatives passed legislation in September aimed at forcing China to raise the value of the yuan.
House Ways and Means Committee Chairman Sander Levin, a Michigan Democrat, and the panel’s incoming Republican chairman, Dave Camp of Michigan, wrote Kirk and Locke on Dec. 9, prodding the administration to get China to accept strong new protections for copyrighted movies, music and software and end discriminatory restrictions on U.S. investors.
The annual meeting “has been an important vehicle for dialogue with China on piracy and other issues,” the lawmakers wrote. “But improved market access results for U.S. companies, as measured by sales, jobs and exports, have been meager.”
Software Piracy
The Business Software Alliance, which represents companies such as Apple Inc. and Microsoft Corp., complains that previous commitments by China to curb piracy haven’t led to a reduction in their losses to unlicensed sales. Before the meeting, the alliance pressed Locke and Kirk to seek from the Chinese a guarantee that U.S. software sales to China would increase 50 percent in two years.
“We will know China has made real progress in reducing piracy only when software companies start seeing substantial increases in sales,” President Richard Holleyman said in an e- mail statement yesterday.
In addition to commitments on software, China agreed to deal with U.S. demands to ease its rules requiring Chinese- developed technologies for government projects and said it would revise an offer to join the government procurement agreement of the World Trade Organization in 2011.
Americans earned more and spent more last month, a hopeful sign for the economy ahead of the holiday buying season.
The government says consumers boosted their spending 0.4 percent in October. That was up from a 0.3 percent increase in September.
People showed a slightly bigger appetite to spend because their incomes rose 0.5 percent, reflecting a slowly healing jobs market. Incomes didn’t grow at all the month before pay day advance. The increases in both income and spending last month were the most since August.
Even with the pickup, consumers are still shying away from the type of spending needed to dramatically lower the 9.6 unemployment rate.
The Niagara Falls City School District is expected to appeal a court decision against the district's residency policy for employees.
Russell Petrozzi, the president of the city's school board, told the Niagara Gazette that he believes the board will vote Thursday to file an appeal.
State Supreme Court Justice Ralph Boniello III ruled that the policy was "vague" and "unenforceable."
If the district does appeal, it will be the fifth residency case that it has appealed this year.
The district's residency policy, which dates back to 1994, requires employees to live in the city.
Details are available at the Gazette's Web site.
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